Equipment Capitalization Threshold Change Information Session June 29, 2016 UW TOWER AUDITORIUM TOPICPRESENTERCONTACTMIN Overview Erin Fujiwara Assistant Director, Equipment Inventory Office Equipment Object Codes Changes Erin Fujiwara Assistant Director, Equipment Inventory Office Sponsored Projects Carol Rhodes Acting Co-Director, Office of Sponsored Programs Kirsten Defries Director of Campus Services, Grant and Contract Accounting Ariba Changes Heather Nicholson Instructional Specialist, Procurement Services and MyFD Q&A Session Mike Anthony, Management Accounting & Analysis Erin Fujiwara, Equipment Inventory Office Carol Rhodes, Office of Sponsored Programs Kirsten DeFries, Grant and Contract Accounting Heather Nicholson, Procurement Services Robert Bradshaw, Financial Reporting 40

Equipment Threshold Change Overview June 29, 2016 Erin Fujiwara Equipment Inventory Office University of Washington

Effective 7/1/2016, UW’s equipment capitalization threshold will increase from $2,000 to $5,000 Equipment over the threshold is  Capitalized,  Depreciated,  Tagged,  Tracked and  Inventoried Equipment Threshold Change

Considerations for the change:  Anticipated reduction of administrative burden for faculty and staff  Resolves threshold alignment issues between UW, the Federal government and the State of Washington  Inventory process is manual and paper-intensive  Our top 24 research peers have increased their respective thresholds to $5,000  Eliminates the previous inconsistent treatment of recharge/cost center equipment ($5K) with the non-recharge/cost center equipment($2K) Equipment Threshold Change

Assets in targeted range ($2,000 - $4,999) represent:  Only 13% of the total value of inventory  Over 65% (40,000 count) of items in total inventory  Over 60% (3,300 count) of equipment items purchased in FY 2013 were between the $2,000 and $4,999 range Equipment Threshold Change

Participants involved in decision making process  Faculty Council on Research  Research Advisory Board  Associate Deans for Research  Post-award Administrative Advisory Group  Office of Research  Office of Sponsored Programs  Office of Planning and Budgeting  Financial Accounting  Research Accounting and Analysis Equipment Threshold Change

Changes for existing assets under $5,000  Assets with a remaining net book value will remain active and continue to depreciate annually  Mass update of new titles in Oasis  Retirement of items with $0 net book value at the beginning of each fiscal year for the next 5 fiscal years (FY17 – FY22)  Assets will not be included in future physical inventory and federal property reports  Active assets can be viewed in Oasis through ad-hoc reports Equipment Threshold Change

Equipment Threshold Change Object Code Changes June 29, 2016 Erin Fujiwara Equipment Inventory Office University of Washington

Equipment Threshold Change Object Code Changes

Equipment Expense Object Codes for State and Non-Grandfathered Award Budgets Object CodeDescription 05-40Non-capitalized Equipment (less than $5,000) 05-41Non-capitalized Equipment - M&E Tax Exemption ($200 - $4,999) * These are existing equipment object codes * Considered non-capital equipment, will be included in the indirect cost calculation and charged F&A Equipment Threshold Change Object Code Changes

New Equipment Expense Object Codes for Grandfathered Award Budgets Object CodeDescription 05-47Non-capitalized Equipment ($2,000 - $4,999) – Grandfathered Awards 05-48Non-capitalized Equipment ($2,000 - $4,999) – M&E Tax Exemption – Grandfathered Awards * New object codes are available in the Sage budget module * Will be available to use in Ariba on 7/1/2016 for grandfathered award budgets only * Considered non-capital equipment, but will be excluded from indirect cost (F&A) calculation Equipment Threshold Change Object Code Changes

Starting 7/1/2016, the following Equipment Object Codes will no longer be available Object CodeDescription 06-10Computing Equipment ($2,000 - $4,999) 06-12Computing Equipment ($2,000 - $4,999) – M&E Tax Exempt 06-14Computer Cluster ($2,000 - $4,999) Computer Cluster ($2,000 - $4,999) – M&E Tax Exempt 06-90Other Equipment Non-computing ($2,000 - $4,999) 06-92Other Equipment Non-computing ($2,000 - $4,999) - M&E Tax Exempt Equipment Threshold Change Object Code Changes

Equipment Threshold Change Sponsored Projects June 29, 2016 Carol Rhodes and Kirsten DeFries Office of Sponsored Programs and Grant and Contract Accounting University of Washington

Existing $2,000 threshold will apply to the following:  Existing funding  Non-competing renewals  Funding received in response to proposals with eGC-1 approval prior to May 1, 2016 (even if start date is 7/1/16 or later)  Will be referred to as “Grandfathered Awards” Equipment Threshold Change Sponsored Projects

New $5,000 threshold will apply to the following:  Proposals for new, competing renewal, and supplemental funding with an eGC-1 approval date on or after May 1,  Budgets submitted with these proposals must categorize items with an acquisition cost of $5,000 or more and a useful life exceeding one year as equipment.  Indirect cost (F&A) must be calculated on all non-capital equipment/supplies with an acquisition cost under $5,000. Equipment Threshold Change Sponsored Projects

New Equipment Expense Object Codes for Grandfathered Award Budgets Object CodeDescription 05-47Non-capitalized Equipment ($2,000 - $4,999) – Grandfathered Awards 05-48Non-capitalized Equipment ($2,000 - $4,999) – M&E Tax Exemption – Grandfathered Awards * New object codes are available in the Sage budget module * Will be available to use in Ariba on 7/1/2016 for grandfathered award budgets only * Considered non-capital equipment, but will be excluded from indirect cost (F&A) calculation Equipment Threshold Change Sponsored Projects

Identifying Grandfathered Award Budgets MyFD Budget Profile > Grant Section > Grant Flag 14 Equipment Threshold Change Sponsored Projects

Equipment Threshold Change Ariba Changes June 29, 2016 Heather Nicholson Procurement Services University of Washington

Starting 7/1/2016, the following Equipment Object Codes will no longer be available to use in Ariba. Object CodeDescription 06-10Computing Equipment ($2,000 - $4,999) 06-12Computing Equipment ($2,000 - $4,999) – M&E Tax Exempt 06-14Computer Cluster ($2,000 - $4,999) Computer Cluster ($2,000 - $4,999) – M&E Tax Exempt 06-90Other Equipment Non-computing ($2,000 - $4,999) 06-92Other Equipment Non-computing ($2,000 - $4,999) - M&E Tax Exempt Equipment Threshold Change Ariba Changes

New $5,000 threshold will apply to:  Purchase orders (BPO and EI)  Non-PO Invoices  eReimbursements  The approval date will determine which threshold will apply.  The $2,000 threshold will apply if fully approved prior to July 1, 2016, with the equipment object code “06”  Anything executed on or after July 1, 2016 will be subject to the new $5,000 threshold. Equipment Threshold Change Ariba Changes

Purchase Order Approval Clarification *The $2,000 threshold will apply in cases where a purchase order has been fully executed (EI or BPO number issued) prior to July 1, 2016 regardless of when the equipment is paid for and/or received. *We recommend submitting requisitions early to ensure the buyers have adequate time to work through any contracting and compliance issues *Check Ariba to ensure outstanding requisitions and contract requests have been processed *Requisitions that are not fully executed on July 1, 2016, will be subject to the new $5,000 threshold Equipment Threshold Change Ariba Changes

Frequently asked questions including the initial announcement are available on the EIO’s website: Equipment Threshold Change FAQ’s

Equipment Inventory Office (EIO) – for questions related to equipment management, Oasis changes, physical inventory, depreciation and purchase of new equipment Office of Sponsored Programs (OSP) – for questions related to proposals, awards, sponsors, applications and proposals Grant and Contract Accounting (GCA) – GrantTracker: for questions related to application of F&A rates and base and grant flag for grandfathered awards Management Accounting and Analysis (MAA) – for questions related to F&A rate calculation, direct and indirect cost Procurement Services – for questions related to purchasing, purchase orders and Ariba Office of Research Information Services (ORIS) – for questions related to Sage Financial Reporting (FR) - For questions related to general accounting and financial reporting Equipment Threshold Change Contact Information